Our recent seminar for Finance Leaders Navigating UK Compliance, Tax and Risk at our London superhub brought together a lively crowd who enjoyed not only a tasty breakfast but also insights from of some of our best people. They shared real, practical thinking on the challenges finance leaders are facing right now.
If you’re a finance leader in a foreign owned, UK based business, you’ll know the reality. You’re juggling pressure from a parent company thousands of miles away while trying to stay on the right side of ever‑shifting UK regulation, tax and reporting. Our invite‑only breakfast seminar brought together specialists from Cooper Parry and beyond to cut through the noise and give finance leaders the clarity they rarely get.
Alongside the technical insights, the session created space to connect, compare experiences and ask the questions that often go unanswered. Finance leaders in foreign owned businesses can feel isolated. Peer conversation matters as much as the technical content.
Accounting Standards Update: CAT KELLY HEAD OF RETAIL
Cat brought her technical expertise and trademark humour to what she called the “sexy” world of accounting standards. Her session centred on three big areas shaking up financial reporting.
Companies House Reform
Recent geopolitical events exposed weaknesses in transparency. Resulting in Companies House is ramping up controls. Key changes include:
- Mandatory identity verification for directors.
- Paper filing to end and software filing will become compulsory.
- Limits on the number of times a company can shorten its accounting reference period.
Facing pressure from the business community about the red-tape and increased costs to small companies, the Government has paused with pushing ahead with the requirements for small companies to
- Move away from abridged or filleted accounts.
- soon having to file their profit and loss account and director’s report.
Whether this roll-back is a complete U-turn or a stay of execution is unclear. Either way its been welcomed by small businesses as all of this marks a major shift in the level of financial information that becomes publicly visible.
All of this marks a major shift in the level of financial information that becomes publicly visible.
New Fraud Reporting Requirements
From November 2025, large companies must have put in place fraud prevention procedures. This sits within the Economic Crime and Corporate Transparency Act and bringing with it heavier expectation on governance, training and documented controls.
FRS 102 and IFRS‑aligned Changes – are you ready?
Big changes are coming.
Leases:
UK GAAP is moving closer to IFRS 16. Operating leases will land on the balance sheet, often creating large new asset and liability numbers. Rent disappears. Depreciation and interest arrive. EBITDA jumps.
Revenue:
A shift to a five step, IFRS‑style model. This will affect businesses with bundled or multi‑element offerings more than traditional buy and sell models.
Management Performance Measures & KPIs:
Management performance measures used internally will need to be disclosed and audited for IFRS adopters. Cat flagged this as a potential commercial sensitivity challenge for many groups.
Key timelines:
- FRS 102 transition applies for accounting periods beginning January 2026.
- IFRS 18 lands from 2027 for IFRS reporters.
- Businesses need to start modelling impacts now, talking to lenders about covenants and planning system changes for software‑only filing.
Cat’s closing message was simple. Do not underestimate the volume of work. Start preparing. Prepare calculations and disclosures and get the audited well in advance.
Transfer Pricing: John Monds ASSOCIATE TAX PARTNER
You might not remember ITV’s Play Your Cards Right, but John gave us his best Bruce Forsyth impression as he shared some facts and figures around transfer pricing.
The punchline is simple. HMRC are collecting more tax from transfer pricing enquiries, taking longer to resolve cases and running teams only marginally smaller than last year. In short, transfer pricing risk is rising and with this in mind, for UK subsidiaries of overseas Groups there are 3 magic numbers:
250 – THE GLOBAL EMPLOYEE Test
It’s very simple. If your worldwide group has more than 250 full time employees, the UK entity is within the transfer pricing rules. Size is assessed globally, not locally. If you are in scope, you need defensible transfer pricing policies and supporting documentation.
GfC 7 – The HMRC Playbook
HMRC’s Guidance for Compliance 7 sets out how they risk assess businesses from a transfer pricing perspective. Two material points are key for UK subsidiaries of overseas parents.
- If the Group team dictates transfer pricing policies without UK input, HMRC considers that as increasing risk. UK teams must sense‑check assumptions made by the Group team and be involved in setting or validating the transfer pricing model.
- Implementation matters as much as documentation. If a policy looks great on paper but charges are not calculated correctly in practice, you are exposed. HMRC expect UK subsidiaries to have appropriate testing in place.
010127 (1st Jan 2027) – ICTS Filing
The International Controlled Transactions Schedule is coming. For periods beginning after 1 January 2027 UK entities will have to file detailed annual disclosures of cross‑border related party transactions. HMRC will use data analytics and AI to review the data, spot anomalies and drive future tax audit activity. John warned the draft version of this form was far more detailed than equivalent filings in other countries, so UK businesses need to pay attention as this develops over the summer.
What to do now
Assess whether you are in scope. Review documentation. Test implementation. Talk to group finance teams. And plan ahead for the data you will need to submit.
VAT. Compliance and Controls: Jo Vincent-Murphy Indirect Tax Partner
Jo focused on why HMRC is intensifying its scrutiny of VAT processes and why this matters even more for foreign owned businesses.
Processes, Controls and VAT Knowledge
HMRC’s GfC 8 and GfC 13 set clear expectations:
- VAT processes and controls must exist.
- They must be documented.
- People involved in VAT reporting must have appropriate VAT knowledge, whether internal or through advisers.
In reality, Jo explained, VAT often lands with someone who never intended to be a VAT specialist. Reliance on system downloads and spreadsheet adjustments will not satisfy HMRC.
Foreign Owned VAT Business Challenges
Cross group activity creates complexity. There are some fundamental questions which need to be answered when considering VAT:
- Who is responsible for VAT on a supply?
- Where is the place of supply?
- Is VAT accounted for in the correct country?
Shared service centres and overseas systems add further difficulty.
What HMRC Are Doing?
VAT enquiries are increasing and are no longer sector specific. If processes are weak, HMRC is more likely to extend enquiries to four years. And they’ll impose harsher penalties.
What businesses should do
- Document end to end VAT processes.
- Identify who understands VAT and whether they need support.
- Test historical positions to spot risks.
- Clarify contractual chains when multiple group companies are involved.
Good VAT controls give peace of mind, reduce penalties and make HMRC interactions far easier.
Economy update: Mark Berrisford‑Smith Independent economist
Mark delivered his trademark clarity on the global economy and why the world is dealing with its most serious energy shock in more than a century. Given the pace of change he’d rewritten his speech several times before the session. It’s possible the summary below is also already out of date…
The Energy Supply Crisis
A significant share of global oil and gas supply is currently disrupted. Damage to infrastructure, geopolitical instability and blocked shipping routes are creating the risk of an actual physical shortage.
Despite that, market prices are not yet reflecting the true severity of the situation. Traders remain optimistic that political solutions will emerge quickly. Mark explained that if disruption continues, the world will need to cut fuel and gas demand by up to 20 percent. That means behavioural change, reduced industrial output and potentially restrictions on business operations in some countries.
The Bond Market Problem
The UK is facing a credibility gap. Bond markets don’t trust the Government’s ability to manage debt. UK borrowing costs have risen faster than other developed economies, creating vulnerability in the event of fiscal policy missteps. If gilt yields rising above six percent, the UK becomes extremely difficult to finance, increasing the risk of political instability.
The one positive is that at the time of writing, inflation is in a far better place than during the 2022 shock. If disruption is short lived, inflation should remain contained. If not, second‑round effects will follow.
Foreign Direct Investment
FDI into Europe and the UK peaked around ten years ago and has fallen since. Political instability, Brexit, supply chain shifts and nearshoring are all factors. Growth economies such as Poland and Spain are bucking the trend.
Mark believes the crisis could accelerate the transition to renewable and nuclear energy. Huge investment will be needed in new pipelines and infrastructure, reshaping economic landscapes for decades.
His final line was simple. You can’t print molecules. If the supply isn’t there, prices will rise. Plan for volatility.
HAVE WE SPARKED A THOUGHT?
Our morning ended with a reminder that although the landscape is challenging, there is still plenty of business out there. Those who get their processes, controls and compliance right will spend less time firefighting historic issues and more time planning for the future.
We’ll be running more sessions for finance leaders in foreign owned businesses so if you’d like to be on the guest list get in touch. And if any of this sparked a thought and you would like to talk it through, we would love to hear from you.
